Strong Job Market May Spur US Fuel Demand
June 10, 2024
Crude oil and refined product price fell slightly on Friday after a better than expected US jobs reports for May 24 lowered the probability of the Fed cutting interest rates this year. After the good US jobs report the US dollar rose by 0.8% which put downward pressure on crude oil prices in general. However, good US jobs is bullish for fuel demand and consumption.
The US Bureau of Economic Analysis reported that 272,000 new jobs were created for May 2024, which waws well above the expected 182,000 new jobs and well above the expected range of (150,000 , 225,000). The BLS also reported that the unemployment rate rose from 3.9% to 4.0% but this may be due to more people attempting to enter the work force and looking for jobs.
Some well respected economic experts believe strong US jobs is better for US fuel demand than a few 0.25% Federal Reserve interest rate cuts and more bullish for fuel oil demand.
Baker Hughes reported that 4 crude oil rigs came offline this past week in the US down to a total of 492 rigs.
Many energy analysts are forecasting an oil supply/demand deficit in the second half of 2024 which is expected to push crude oil prices higher. Commerzbank is forecasting Brent at $90 by year end.